Key Takeaways
- Indian court quashes order to stop Red Bull using 'energy drink' label.
- Decision affects Pepsi, Monster Beverage, and Reliance.
- Regulator will appeal against the court’s decision on public health grounds.
An Indian court on Tuesday quashed the food regulator’s order to stop Austrian beverage firm Red Bull from using the label ‘energy drink’ on its cans, saying the decision had been taken without allowing the company to explain its position.
The ruling comes as a major relief for Red Bull, as well as Pepsi, Monster Beverage, and billionaire Mukesh Ambani’s Reliance, which had privately criticized India’s move, fearing it could damage their brands.
The regulator ordered makers of high-caffeine beverages sold as ‘energy drinks’ to stop using the description in June, rejecting efforts to stall the move in a market expected to be worth $1.6 billion by 2028.
In its court filing, Red Bull argued that the prohibition of the label ‘introduces substantial regulatory uncertainty and adversely affects’ its existing and planned commercial investments.
The court agreed with Red Bull, stating that the regulator took the decision ‘without affording any opportunity’ to the company to provide its views.
Energy drinks have sparked health concerns among regulators in several countries, who worry they contain significant amounts of caffeine, sugar, and taurine, an amino acid, which research suggests can contribute to health problems including high blood pressure and heart problems.
The energy drink market in India boomed after Pepsi launched Sting in 2017, with its 20-rupee ($0.21) plastic bottles proving popular among 15- to 19-year-olds and in rural areas, according to consumer research firm Euromonitor.
The court’s decision will have implications for the regulatory landscape in India, as the Food Safety and Standards Authority of India will appeal against the court’s decision on public health grounds, a government official told Reuters.
